MGM Resorts International has made a significant move towards enhancing its digital capabilities with the acquisition of Tipico’s US tech stack along with its trading teams in Columbia, Europe, and the United States. The decision to integrate Tipico’s sophisticated platform into LeoVegas’ international betting operations is seen as a pivotal step for MGM, streamlining technological advancements that would have otherwise taken considerable time to develop in-house.
One M&A advisor, speaking to iGaming Business about the platform, remarked, “It’s a phenomenal piece of kit with no customers; Tipico has been trying to sell it for a year.” The advisor continued, “By having a player database in the US, MGM could negotiate its way out of the Entain BetMGM joint venture without worrying about losing the technology.”
The deal has raised eyebrows and sparked discussions among industry experts. Aaron Lee, an equities research analyst at Macquarie US Equity Research, explained that the acquisition could expedite LeoVegas’ ability to establish a strong footing in emerging markets such as Brazil. “The deal drastically shortens the timeline to LeoVegas gaining control over their tech stack compared to developing these capabilities in-house and should improve their ability to have a strong start out of the gates in emerging markets such as Brazil,” Lee commented.
Brazil’s online betting regulations are anticipated to be finalised in July, with a full-scale launch expected by early 2025. Speaking at JP Morgan’s Gaming, Lodging, Restaurant & Leisure Management Access Forum in March, Bill Hornbuckle, CEO of MGM Resorts, had already highlighted his ambitions to break into Brazil and other Latin American markets. “We see that [LeoVegas] as scalable if you think about a place like Brazil or some other new markets in LatAm. We think we’re positioning ready to go after and we’re excited about that,” he expressed.
Despite the strategic acquisition, Lee remains skeptical about MGM ending its BetMGM joint venture anytime soon. “Both sides have consistently signaled their commitment to the JV and that BetMGM will remain the vehicle for the US and Ontario,” he noted. However, Lee acknowledged that securing a complete tech platform for BetMGM through the Tipico deal is a strategic move by MGM to prepare for any potential structural changes in the joint venture in the future.
In 2021, MGM’s £8.1 billion bid for Entain was not well-received, and Hornbuckle has since confirmed that he would not be making another offer. When asked if MGM would consider an independent betting offering in the US, an MGM spokesperson responded, “We are exclusive to BetMGM in the US.”
Following the announcement, LeoVegas is expected to transition away from its current Kambi sportsbook platform.
. At the time of the announcement, Kambi’s share price dropped by 9%. A note from ABG Sundal Collier dated June 25 suggested that LeoVegas would likely migrate to the Tipico platform once its contract with Kambi ends, noting that LeoVegas contributes approximately 3% to Kambi’s revenues.
“Kambi’s long-term earnings will likely take a hit. However, we do not rule out the potential of MGM becoming a modular client; for example, we see BetBuilder as an attractive product for a company building an in-house sportsbook, as many big operators have outsourced that product according to our research,” the note added.
At the JP Morgan forum, Hornbuckle emphasized the importance of acquiring a sportsbook platform for MGM’s LeoVegas business growth, citing that sports betting and sports betting technology were crucial components missing from their portfolio. He also indicated that the firm was close to securing both a betting platform for BetMGM internationally and an in-house live casino offering, beyond the core casino and sports betting operations.
In a related development, MGM announced a collaboration with Playtech on June 20 to stream live casino games from two of its Las Vegas Strip properties. This initiative aims to provide users with an authentic land-based casino experience.
In a December interview with iGB, Hornbuckle outlined MGM’s vision for digital expansion through BetMGM and LeoVegas across Europe, Canada, and South America. He highlighted the desire to consistently engage customers year-round through digital platforms.
MGM has been strategically assembling a top-tier digital gaming team under the leadership of Gary Fritz, President of Interactive at MGM. Fritz, who previously led gaming for IAC and helped develop Match.com, is responsible for MGM’s growth strategies in digital gaming, including both organic expansion and M&A activities. Supporting him is James Brodie, MGM’s Head of Interactive, International, and a former Goldman Sachs director for European gaming, leisure, and real estate.
Despite Tipico’s lack of traction in the US market, the wider Tipico group, largely owned by private equity firm CVC Capital Partners, has been looking to optimize its position in the gaming industry possibly for an initial public offering (IPO).
In a LinkedIn post, Claire Alexander, VP of Casino for Tipico US, mentioned that several staff members are now on the market following MGM’s acquisition. Tipico’s group CEO, Joachim Baca, thanked the US teams for their dedication and innovation over the past five years, emphasizing the attractiveness of their proprietary sports betting and gaming platform created for the US market.
